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I am in the military and have an auto lease. If I am ordered to move overseas or deploy, can I cancel or terminate my auto lease without paying early termination charges or a penalty?

Answer:

Yes, under certain circumstances, the Servicemembers Civil Relief Act (SCRA) allows active duty service members to terminate an auto lease without having to pay early termination charges or a penalty. 

Eligibility to terminate your auto lease

In order to terminate an auto lease under this law, you must have entered into the auto lease: 

  • Prior to active duty, and then been called onto active duty for 180 days or longer; or
  • During active duty, and then received orders for:
    • a Permanent Change of Station (PCS) from a location inside the continental United States (CONUS) to a location outside the continental United States (OCONUS), or a PCS from a location OCONUS to any new location, or 
    • deployment with a military unit or in support of a military operation for 180 days or longer.

 If you entered into your auto lease during active duty military service and then received PCS orders, here are some examples of which orders do and do not allow you to terminate your auto lease under the SCRA:

  • OCONUS to any other state or location, for example, Alaska to Hawaii, or Alaska to Texas, or Hawaii to Germany, you can terminate,
  • CONUS to OCONUS, for example, Georgia to Alaska, you can terminate.
  • CONUS to CONUS, for example, Georgia to California, you cannot terminate. 

Carefully read your lease terms and consider your situation before signing the contract. The SCRA does not allow you to terminate your contract if you receive PCS orders from one CONUS location to another, so if you know you may receive those type of PCS orders, make sure your lessor will allow the vehicle you intend to lease be taken out of state.

How to request to terminate your auto lease

To terminate your auto lease, you must:

  • Provide a written notice of termination to the “lessor.” The lessor is the company or the individual that leased you the vehicle, or the lessor’s agent;
  • Provide a copy of your military orders to the lessor or agent;
  • Return the vehicle within 15 days after the date of delivery of the written notice of termination; and 
  • Deliver the written notice by hand, by a private carrier, or by certified mail with return receipt via the US Post Office. Email notice is not acceptable. 

 Your auto lease will only be terminated after you complete all of these steps, including returning the vehicle.

While the lessor can’t charge you for the early cancellation of the lease, the lessor can still charge you for any taxes, title and registration fees, summonses, or any other outstanding fees, including reasonable charges for excessive wear and tear and mileage that were due and unpaid on the date of termination. If you made any advance payments, the lessor must provide a refund to you within 30 days of the termination. 

Learn more about whether you’re covered by the SCRA.

Learn more about the 6 percent interest rate protection for active duty servicemembers under the SCRA.  

Learn more about the  from the Department of Justice. 

If your lessor refuses to accept your lease termination, contact your local JAG office for more information. To find your JAG Legal Assistance Office use the . You also may be able to get assistance from your .  

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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The Miss April updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.

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